Editor: I read with interest your investigation into the stockpiling of CIL receipts. CIL does not place any obligation on local authorities to actually spend the revenue raised. The funds are simply ring fenced for provision of infrastructure at some point. This can lead to the stockpiling of funds mentioned in your investigation.
This stockpiling breaks the link between new developments permitted in an area and the provision of the infrastructure needed to support them. This is a problem, as one of main objections local communities have to new developments is lack of adequate supporting infrastructure.
Section 106 agreements contain mechanisms to ensure the money developers provide for local infrastructure is spent within a reasonable time period. If it is not, then councils must return the funds. This gives local authorities an incentive to bring infrastructure forward and a mechanism that can be used to reassure communities that the promised infrastructure will be forthcoming. There is no such mechanism in place with CIL.
The proposed revised infrastructure levy does not improve this situation. Rather than requiring councils to actually deliver infrastructure, MHCLG has suggested giving local authorities greater flexibility over CIL funding, “allowing them to spend receipts on their policy priorities, once core infrastructure obligations have been met”. MHCLG does not define “core infrastructure obligations”, but suggests one policy priority that could benefit from CIL funding would be reducing council tax.
Your investigation seems to demonstrate that government policy is going in the wrong direction. Rather than continuing to weaken the connection between new development and the provision of infrastructure, we should be looking to strengthen it.
Nicola Gooch, planning partner, Irwin Mitchell